EXAMINING THE INFORMATION TECHNOLOGY SECTOR IN WALES

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Published this month, “The “Building The Future We Need” report from techUK - the UK’s leading technology membership organisation - sets out some of the digital challenges that Wales faces and how these can be addressed by the public and private sectors to benefit the economy over the next few years.

According to the report, the information technology sector in Wales employs around 24,000 people and is predicted to add around £1.5 billion to the economy over the next five years. But despite this impact, there are considerable challenges for the nation in terms of maximising the potential of the digital economy. 

In terms of digital infrastructure, residential superfast broadband coverage in Wales had reached 93% by 2019 with 4G data services at 58% for geographical coverage by all operators. 

In addition, Superfast Cymru had provided almost 733,000 premises across Wales with access to fast fibre broadband and, as a result of this work, superfast broadband coverage has more than doubled in Wales.

However, whilst this investment has led to use of digital devices growing over the last few years, nearly one in five of the Welsh adult population do not regularly use the internet. 

In fact, it is estimated that digital skill shortages cost Welsh businesses £350 million in 2018 which has resulted in many people in Wales being stuck in low-skill traps involving a cycle of low-skill, low-wage, and low-productivity.

This is exacerbated by the absence of a pipeline of digital skills with the wider population lacking basic digital knowledge, especially in schools where it is argued that there is little foundation for a sustainable digital culture.

Another potential issue down the track is the prospect of jobs being replaced through automation which seems to be a higher threat to Welsh employees because of the nature of the labour force i.e. 6.5% of jobs in Wales (or 130,000 roles) are amongst those with the highest potential for automation which is a higher rate than for the UK as a whole.

Given this, it is clear that more could and should be done to increase the use of digital technology within the Welsh economy. 

For example, the report suggests that digital can be used to accelerate local growth opportunities within a range of sectors that can contribute to jobs and prosperity including advanced materials and manufacturing, energy and environment, financial and professional services, food and drink, life sciences and tourism. 

In particular, concerted action should be taken to ensure that these sectors are at the forefront of digital adoption to support and accelerate their growth, especially in encouraging greater collaboration between local tech firms and firms in those growth sectors. 

The public and private sectors will need to work more closely together to strengthen the digital economy in Wales and innovators in government and business should also be challenged to come up with new digital ideas and solutions to solve some of the most important problems faced by society including housing, healthcare and supporting high streets.

In terms of education, Wales needs to be ahead of the curve of next-generation tech skills and this needs to start in schools with a digital curriculum for early years  pupils that prepares them for the future. 

But perhaps the most important aspect is to maintain the momentum in the increase in digital use over the last nine months where the COVID-19 pandemic and subsequent lockdown has acted as a catalyst to accelerate digital adoption across many Welsh businesses.

The question is whether this ‘new normal’ of remote working, e-commerce and increased use of digital platforms will continue or will it be the case that many people will want things to go back to how they were before the pandemic? 

One would hope it is the former rather than the latter and it is critical that the Welsh Government, business representative bodies, digital firms and educational institutions must now come together to ensure that Wales continues the digital transformation progress that has been made so far during the COVID-19 pandemic

Certainly, if firms and organisations of all sizes continue to advantage of the opportunities afforded by digital tech, the economy will prosper and thrive over the next few years.


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